What happened

Shares of Brazilian airline Gol Linhas Aereas Inteligentes (NYSE:GOL) popped more than 10% in early trading Monday morning, and remain up a healthy 8.6% as of 11:35 a.m. EDT. But why is Gol stock up at all?

That's not immediately clear.

With nearly 515,000 reported coronavirus infections and more than 29,000 related deaths, Brazil remains a hot spot for COVID-19. That's not really great news for Brazil, or for airline stocks in general, or for Gol in particular.  

The silhouette of an airplane flies among coronavirus viroids.

Image source: Getty Images.

So what

That being said, Gol stock got hit last week when it was reported that the bankruptcy of another airline, Chile-based LATAM Airlines (NYSE: LTM), could complicate Brazil's plan to grant a financial bailout to airlines flying into and out of Brazil. In addition to LATAM, Gol joins Brazilian flyer Azul (NYSE:AZUL) in seeking a bailout.  

Reuters noted that complications arising from LATAM's bankruptcy could make it harder to iron out the details of a bailout for the other two carriers until at least late June. The risk that Gol might not survive that long, and might follow LATAM into bankruptcy court before Brazil has a chance to rescue it, presumably weighed on Gol shares last week.

Now what

Can Gol survive long enough for Brazil to bail it out? According to data from S&P Global Market Intelligence, the company has more than $300 million in cash available to it, but more than $3.1 billion in debt -- not the best situation to be heading into a recession. That being said, LATAM's debt burden is even bigger ($9.1 billion, net of cash on hand), and Azul is in a somewhat worse position than Gol as well (with $3.6 billion in net debt).

Regarding debt at least, it looks to me like Gol might actually be the strongest of the three airlines -- and that could be why investors are giving Gol stock a second look this morning.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.